Suncor Energy and Terra Nova partners agree to short-term project funding
CALGARY – Suncor advised that the co-owners of the Terra Nova FPSO facility and associated Terra Nova Field have reached an agreement in principle to restructure the project ownership and provide short-term funding towards continuing the development of the Asset Life Extension Project, with the intent to move to a sanction decision in the Fall. A subset of owners will increase their ownership of the project for consideration payable from the other owners. Suncor’s ownership will increase to 48% from approximately 38%.
The agreement is subject to finalized terms and approval from all parties, including board of director approval where appropriate, and is contingent upon the previously disclosed royalty and financial support from the Government of Newfoundland & Labrador. Further details will be provided when agreements are finalized.
“Over the past year, Suncor has worked diligently with all stakeholders to determine a path forward for Terra Nova,” said Mark Little, Suncor president and chief executive officer. “Despite numerous setbacks, Suncor, as operator, continued to persevere and explore options to achieve an economic return for our investors while protecting the employment of hundreds of Newfoundlanders and Labradorians. Although this agreement in principle is not a guarantee, it sets a path forward in the next few months to secure a return to operations for many years to come.”
Suncor’s 2021 guidance remains unchanged.
Commenting on the announcement, Charlene Johnson, President of the Newfoundland and Labrador Oil & Gas Industries Association, said “This announcement is long-awaited positive news for our offshore oil and gas industry, and indeed our province. The Terra Nova project has provided thousands of jobs, billions of dollars in royalties and revenue, and helped our supply and service sector grow its expertise in operating in a harsh weather environment. For Noia members involved in the supply and service sector and the thousands of people who rely on this project for their livelihood, this is extremely good news accompanied by immense relief.”
Prior to completion of the restructuring, the Terra Nova co-owners are Suncor (operator, 37.675%), ExxonMobil (19%), Equinor (15%), Cenovus (13%), Murphy (10.475%), Mosbacher (3.85%) and Chevron (1%).